Professional Documents
Culture Documents
2
Todays Presenters
3
Cautionary Statement
4
Lee Schram
Chief Executive Officer
5
Second Quarter 2018 Highlights
6
Keith Bush
Chief Financial Officer
and Senior Vice President
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Q2 Results
$ in millions Better/
2018 2017
(Worse)
Revenue
Small Business Services $317.7 $302.9 $14.8
Financial Services 139.3 147.7 (8.4)
Direct Checks 31.2 34.6 (3.4)
Consolidated $488.2 $485.2 $3.0
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Q2 2018 – Earnings Per Share
• Diluted earnings per share for the second quarter was $1.25
• Adjusted diluted earnings per share for the second quarter was $1.40
grew 8.5% from the second quarter of 2017
$0.05 better than the high-end of our prior outlook
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Balance Sheet and Cash Flow
$ in millions
Cash Provided by
Total Debt Operating Activities
$766.8 *
$709.3 $151.6
$146.9
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2018 Outlook
Small Business Financial $ in millions, except for EPS
Direct Checks
Services Services
Full Year Full Year Full Year Full Year
Expected Increase Expected Increase Expected Decline
Revenue
$2.045B to
$2.065B 4% to 5% 8% to 9% ~11%
• Growth in our online, dealer • Continued growth in MOS • Secular check order
Q3 & major accounts channels including data-driven declines
$496M to $504M • Price increases marketing and treasury
• Double-digit revenue management solutions
growth in MOS • Continued acquisitions
Diluted • Small tuck-in acquisitions
FACTORS
Full Year
$5.23 to $5.35 • Believe the economy is beginning to strengthen, we continue to be cautious
Q3 • Cost and expense full year reductions expected to be ~$55M, net of investments
$1.15 to $1.21 ~ 70% of expected reductions from sales and marketing
EPS
11
Capital Structure
12
Lee Schram
Chief Executive Officer
13
Initial Outlook Compared To Current Outlook
Revenue in millions, EPS in dollars
Adjusted
Revenue
Diluted EPS
January 25, 2018 – High End of Outlook $2,105 $5.80
Treasury Management Services Acquisition ($ 21) --
FX / eCheck Customer Delays ($ 5)
Data-Driven Marketing ($ 17) (0.15)
Small Business Marketing Solutions + Web Services $ 12
Forms & Accessories ($ 9)
Additional Cost Reductions -- 0.08
Delayed Innovation Investments -- 0.03
Income Tax Rate -- 0.04
July 26, 2018 – High End of Outlook $2,065 $5.80
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In 2018 We Expect . . .
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Marketing Solutions & Other Services
$ in millions
2017 2018 Estimated
Actual Expected
Outlook 2018 by Annual
Categories Revenue Key Revenue Growth Initiatives
Revenue $ Revenue $ Segment Recurring
Growth Rates
(% of Total) (% of Total) Revenue
2018 revenue outlook includes ~$80M new acquisitions + ~$45M carryover acquisitions
or ~$125M total
16
2018 Key Focus Areas for SB and FS
Segment Focus Areas Initiatives
1) Data Driven • Grow data driven marketing solutions, leveraging proprietary data with
Marketing robust analytics and assess additional acquisitions
Financial
Services
• Continue to grow treasury management solutions - payment acceptance
2) Treasury
of multiple payment types, reconciliation and exception resolution
Management
• Profitably integrate and scale previous acquisitions, assess additional
Solutions
acquisitions, primarily focused in the financial services market
17
Direct Checks
• 2018 Expectations:
Revenue decline around 11% range
Marketing solutions and other services revenue to account for about 10%
of Direct Checks revenue
18
Questions and Answers
19
In Summary
20
Deluxe Up-Coming Events
21
Appendix
22
Replay Of This Call
• Presentation slides:
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Revenue Growth Reconciliation
Revenue Growth reconciliation from GAAP to Non-GAAP
2018
Summarized 2018* 2017 2016 2015 2014
Q2
Revenue Growth 4.8% 0.6% 6.3% 4.3% 5.9% 5.6%
Other (incl. FX and business day adj.) 0.1% (0.2%) 0.3% 0.1% 0.5% 0.4%
Adjusted Organic Growth / Decline (0.6%) (2.1%) (1.1%) (1.9%) (2.0%) (0.7%)
Adjusted organic revenue growth/(decline) is provided to assist in understanding the comparability of the Company’s revenue growth for the years ended December 31,
2014 – 2017, the second quarter of 2018 and as expected for the year ending December 31, 2018. The Company’s management believes that adjusted organic revenue
growth is a useful financial measure to compare revenue growth excluding acquisitions, divestitures, exited business, foreign exchange effect, extra days and other non-
comparable revenue items. This presentation is not intended as an alternative to results reported in accordance with generally accepted accounting principles (GAAP) in the
United States. Instead, the Company believes that this information is a useful financial measure to be considered in addition to GAAP performance measures.
*2018 is an estimate based on the Company’s Outlook provided on July 26, 2018.
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Investor Relations
Tel: 651-787-1370
ed.merritt@deluxe.com